Retail Alcohol Monopolies and Regulation: Preserving the Public Interest Position Paper

Introduction

Alcohol is not just another consumer product.  It contributes to a wide range of health and social problems such as drinking and driving incidents, violence, and other hazards as well as chronic conditions such as liver cirrhosis, cancers and addiction. At the same time, it provides commercial benefits to private industries, employment for citizens and revenues for governments. This position paper by the Centre for Addiction and Mental Health (CAMH) asserts that retail alcohol monopolies with a strong regulatory agenda have a key role in preventing alcohol-related harm, and therefore should be maintained. 
 
Governments have established legal frameworks to balance the interests of the consumer, commercial benefits from the production and sale of alcohol, and public health and safety concerns associated with alcohol use.  In Canada, these potentially conflicting interests have led to the establishment of government-run monopolies for the retail distribution of alcohol.  In Ontario, the Liquor Control Board of Ontario (LCBO) is the only off-premise retailer (package store) of liquor and imported wine. These products are sold through its regular stores and its agency store system of smaller outlets located in outlying communities.  The Ontario Government, through the Alcohol and Gaming Commission of Ontario (AGCO), also controls the sale of beer through privately run outlets, and domestic wine through Ontario wine outlets operated by individual manufacturers.  In addition, the AGCO regulates the sale of alcohol at licensed establishments (e.g., bars and restaurants) through Special Occasion Permit events and home delivery services.

In recent years, government alcohol monopolies have come under scrutiny in many provinces for a variety of reasons, including: 

• Pressure from the business community to privatise retail alcohol monopolies;
• A general orientation to privatise government services and agencies; 
• Perceived consumer pressure to expand access to alcohol and increase consumer choice;
• International free trade agreements, which tend to erode the ability of governments to control their domestic alcohol markets or to have government-run retail systems (e.g., Grieshaber-Otto & Schacter, 2002).

The following points are addressed in this paper:

• Research demonstrates a strong association between increased sales, higher consumption rates and increased drinking-related problems in a population.
• Alcohol monopolies are an important tool for governments to implement alcohol policies that control sales, promote public health, curtail risk and reduce drinking-related damage. 
• A central mandate of alcohol monopolies, namely controlling drinking-related harm, has been eroded as alcohol marketing and promotion agenda have gained ground. 
• Alcohol monopolies have the potential to facilitate the effective and efficient deployment of public health-oriented control policies and government measures, which are more complicated to initiate or maintain in a private system.

Therefore, an alcohol monopoly, with a strong public health and safety mandate, is an effective way to implement appropriate alcohol policies that reduce drinking-related harm.

• Print